I do not profess to be an expert on the legal machinations of the system – of the details of the regulations that end up screwing things up for the consumer. What I am, however, is an expert *user* of the system, as someone who has purchased his own healthcare plan (ie: “individual” plan – even though it’s for my wife and me – as opposed to “employer” plan) for the past 7 years. I have watched both deductibles and premiums skyrocket, and it’s starting to come to a head as consumers finally start to actually bear the costs of medical care: they see how screwed up the system is.

My current obsession is “balance billing.” Balance billing is a national story that’s being addressed by legislation in individual states. The cliff notes are: when you go to an IN NETWORK provider, as designated by your insurance company, you can be hit with OUT OF NETWORK provider bills which – and this is the key part – you have no control over.

For example, I had a radiology procedure done at an in-network facility. They then sent it to an out-of-network radiologist to do the reading, and I got an out-of-network bill. Nope. Not happening. Until you give me the ability to choose my radiologist (which is one solution, although perhaps a terrible solution, as it puts a ridiculous burden on the consumer) there is absolutely no way I am paying this bill. I called the facility, they denied responsibility, I called Anthem, and Anthem took care of it, telling me they’d make a one time adjustment. I, of course, replied, by telling them that I would not accept their one-time limitation, and that I would fight it every time I got screwed by such bills beyond my control.

There are ample stories you can find with a simple online search of much more serious issues: consumers get whacked for out-of-network emergency care (New Hampshire, where I live, has passed legislation to indemnify the consumer for emergency care with respect to in/out of network), hospital patients get hit with out of network bills from doctors who come by to check on them during rounds, and the classic case: out of network bills from anesthesiologists.

I have a friend who is a member of the NH House of Representatives. With the help of the NH Insurance Department, who I have spoken with at length, my Representative friend put forth a bill proposing to end “balance billing” – the bill would prevent providers who contract with a given facility from billing the patient for amounts beyond what insurance would cover for in-network care. In other words, if I go to Concord Hospital, an in-network facility in my current plan, it will be up to the hospital and its providers to negotiate their contract such that the providers can’t just say “oh, we’re not in-network, you owe us $X.”

I honestly don’t even know how to argue the “fairness” or “rightness” of this concept – it’s blatantly obvious to anyone who has actually experienced it, and it has nothing to do with “capitalism” or “free markets,” which are concepts that the Chairman of the committee that squashed the bill enunciated. If I cannot choose my anesthesiologist, how can I be expected to pay for her when the facility – who is benefiting from its own in-network status – fails to arrange for one within the network?

Now, at the initial bill hearing (6 months ago), the members of the NH Insurance Department clearly enunciated the issue, and I testified with personal stories which emphasized the problem: the consumer cannot be held responsible for bills which he has no control over. I watched as heads of the Pathology Union, the Anesthesiology Union, and the Radiology Union (these are the Big Three of Balance Billing) stood up in succession and said things like “I have to put food on the table for my kids,” as I sat there with my mouth agape that the NH House of Representatives Commerce Committee was actually accepting that excuse. The result of the hearing was that “everyone agreed something needed to be done,” but that they needed more work on the issue. It was remanded to a study session, which I attended last week.

I went to this session, which was attended by:

NH House of Reps Commerce Committee Members

2 reps from the NH Dept of Insurance

Anthem’s lobbyist

Tuft’s Healthcare’s lobbyist

Harvard Pilgrim’s lobbyist

head of the Hospital union

me

The Big Three of Balance Billing Unions were conspicuously absent. I went into the hearing thinking that the problem was somewhere with the insurance companies – they’re easy targets for our consumer hatered. After the hearing, however, and after talking at length with both Harvard Pilgrim and Anthem’s lobbyists, it’s clear to me that the problem lies with the hospitals. Let me explain.

As I noted above, the hospitals get the benefit of patients choosing to have procedures done at their facilities because the hospitals are listed as in-network. The hospitals also choose where they send their radiology and pathology work to be read, and who they hire for anesthesia. Thus, it is painfully obvious that the hospital is the one who should be responsible for arranging in-network providers. Amazingly, at the initial hearing on the bill earlier this year, a doctor on the Committee asked me: “Why should I be responsible for ensuring that the provider is in-network?” I replied instantly: “BECAUSE YOU CAN! I have no ability to do that if I’m not even choosing my provider! I choose YOU – the doctor – to do my procedure. I do it at an in-network hospital. I literally can do no more.”

So the format of this work session is that members of the Commerce Committee, sitting at a big U-shaped table, raise there hands to be acknowledged by the Chairman, and then make their case, or ask questions to the members of the “audience,” which included me and the lobbyists. The Insurance Department members enunciated the problem so clearly that I didn’t feel the need to even raise my hand and add anything, until 40 minutes into the meeting when the former Chair of the Committee suggested that more regulation only screws things up – that Free Markets will solve the problem.

I raised my hand and calmly pointed out that although I, too, am a huge fan of free markets, the concept is mis-applied when dealing with the healthcare system, as we have nothing resembling a free market in healthcare. It’s heavily regulated (many of you may not know that individual purchasers cannot buy the same plans that employers can offer their employees!??), and the consumer’s choices and the coverage abilities of insurers are nowhere near free.

The former Chair asked me if I would want the ability to, ahead of time, know that the providers assigned to my procedure would be out-of-network. Of course – again – at a bare minimum that is what should be required, even if it’s a crappy solution: is the patient supposed to re-schedule his procedure because the hospital says “oh by the way we’ve scheduled you with an out-of-network radiologist?”

The Chair then turned to the head of the Hospital Union and asked her why they can’t tell do that. She said, I kid you not, “We don’t have the ability to tell ahead of time.” Now, I simply blurted out: WHY NOT? We have computers. We have databases. It would probably take me less than half a day to build you an Excel Spreadsheet that could get you that information.

And the light bulb went off in my head: the problem is the hospitals: not only do they not care, they’re not even incentivized to fix the problem: they’ve gotten me to come to their facility, and dispute over the anesthesia bill will be between me, the anesthesiologist, and my insurance company – so the hospital is either indifferent, or Dis-incentivized from getting involved! After all, if the result of this whole shebang is that the hospitals who cannot guarantee in-network service providers lose their own in-network status, the hospitals will be much worse off! They just want to preserve the status quo.

I spoke up to tell another story – we dealt with a planned surgical procedure earlier this year which required a multi-night hospital stay. I was concerned, as I always am, with out-of-network billing possibilities. Anthem sends me letters ahead of time telling me, the consumer, to ask the hospital for in-network “facility based providers” – hospital-speak for pathologists, radiologists and anesthesiologists. Guess what happened when I made this request to everyone I came in contact with in the hospital intake process: they stared at me like I had 3 heads. “You have no idea what I’m talking about, do you?” I asked. nope. “Am I the first person to ever ask this question?” yep.

Anyway, the bottom line for me was that the hospital had the ability to rectify these bad-billing situations if they wanted to. Beth Israel Hospital in Boston did a tremendous job handling the billing for the complicated surgical procedure we had planned. Concord Hospital in New Hampshire claims they can’t send radiology to an in-network radiologist, even though the adjacent imaging center within their own computer network which charges 25% of Concord Hospital’s fees manages to do it without incident. After listening to the Hospital Union head make nonsense excuses, it finally clicked for me.

This post was inspired by a Bloomberg article today about drug reimbursements. Having not taken a lot of prescription drugs, I am still a noob when it comes to navigating this branch of the healthcare system, but I was surprised last week when I filled a prescription where the rate that my insurance had negotiated was higher than the rate the grocery store would have charged me if I was a part of their $7/year discount plan.

Here are the cliff notes for the Bloomberg article: when you pay for a prescription, your insurance company (or Pharmacy Benefit Manager) may get a rebate on the drug, even if you pay for the drug yourself because you haven’t met your deductible. This is obviously mind-boggling to any pragmatist. Why does the PBM negotiate a rate and a reimbursement? Why isn’t the “rate” just the net of the rate paid and the reimbursement? From the article:

“Robyn Curtis, a staff adviser at the University of Southern Mississippi in Hattiesburg, has a 13-year-old daughter with diabetes. Each month, the girl’s insulin pump requires three vials of NovoLog-brand insulin, which cost $890 under her plan, Curtis says. Her daughter’s insurance has a $2,600 deductible.

So Curtis was beside herself when she learned that NovoLog offers rebates — almost always paid to insurance companies and drug-benefit managers, not patients — that might have cut the out-of-pocket cost in half earlier this year.”

So the consumer pays the $890, and then the insurance company gets a rebate check for half that amount. (!!!!???!!!)

Why does this consumer have to pay $890 and then watch her insurance company get a $450 rebate? Why isn’t the rate up-front just $890 – $450? In the beginning of this post I told you that I wasn’t an expert on the legal nonsense behind the scenes. I am, however, qualified to tell you that this is screwed up.

The end of the Bloomberg article, however, is what inspired this post, as it enunciated the same nonsense-excuse of the type I heard from the Hospital Union head at the balance billing session I attended, emphasis mine:

But why not break up the rebate checks and send the cash back to the patients who paid for the drugs? Representatives of corporate health plans say it would be impractical to do so because they get the money months after employees bought the drugs.

Says Laurel Pickering, chief executive of the Northeast Business Group on Health, a coalition of large employers: “It would be very difficult to figure out how to administer that.”

To that I have one response: BULLLLLLLLSHIT. The insurance company and Pharmacy Benefit Manager know exactly who bought which drugs. They know exactly how much rebate they get for each drug. They have the ability to send the rebates to the consumers who deserve them*. Instead, though, they have set up a system which is deliberately obfuscatory for one reason: to screw the consumer. Now that consumers are dealing with higher deductibles, these absurdities are starting to come to light.

This long, rambling post intended to illustrate a simple concept: there are powerful lobbies within the healthcare system which are making nonsense excuses to maintain the status quo and screw consumers. Until we stop accepting these excuses, nothing will change.

-KD

*Note: CVS/ESRX seems to do it right? From the article:

“CVS Health Corp., which administers drug plans for employers and insurers, gives “the vast majority of rebates” back to those clients, said spokeswoman Christine Cramer. Express Scripts Holding Co., which plays the same role, said it returns about 90 percent of rebates to its customers, generally keeping about 10 percent as its compensation.”

postscript: Multiple parties in the balance billing hearing mentioned that anesthesiologists are often scheduled with little advance notice. Fine – still not my problem as a consumer. It’s up to the facility to negotiate with its providers to accept standard rates. While the anesthesia union will claim that caps on rates will result in fewer providers willing to provide service, it ignores the other side of the economical reality: an anesthesiologist without a facility cannot practice…. The facility (hospital) has the ability and leverage to negotiate in this situation, where the consumer has none.

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